Home | Friday 11th July 2008 | Issue 639

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IN-EQUITY

Campaigners have announced a global day of action on Thursday July 17th to highlight the underhand business practices of private equity firms, who are able to keep their vast fortunes and financial shenanigans secret, whilst they buy-out some of the world’s largest corporations. Actions are being planned in 100 cities in 25 countries targeting the biggest and oldest such company - KKR (Kohlberg, Kravis, Roberts) - and will involve worker and community organisations, environmentalists and activists.

Not facing the same levels of prying from the media and financial insiders that public listed companies get, Private Equity firms are able to build up their wealth without the irksome impediments of either scrutiny or scruples as they purchase massive companies, saddling them with the same enormous debts they’ve generated to buy them. Now, yer SchNEWS has no major problem with multinationals becoming debt-ridden, but this is of course not being done as part of an anti-capitalist master plan, hatched by an insane genius with a laptop and a head for hacking...

No, by dumping these debts back onto the companies they are able to use a clever loophole to greatly reduce the level of tax payable. In 2007 KKR bought out Boots for £11bn, £8bn of which was financed by debt, allowing the company to deduct around £500 million in ‘interest expenses’ from the income of Boots. In 2006 Boots’ income was £480 million, which means that KKR effectively will not have to pay any corporate tax, instead of the £130 million they paid before they bought the chemist.

At a time when the country looks to be unstoppably heading into recession and the government is punishing the poorest by removing the ‘10p tax’, companies worth billions are able to get away with paying bugger-all. As a statement on www.privateequitysucks.com notes, “While the money not paid in taxes fills a few bank accounts, it is sorely missed in public services like health, education and housing, While the government tells us to prepare for crisis, some people are ready to make money out of it.”

* Demonstration next Thursday (17th), 1pm in London, meeting at Trafalgar Square (near the lions) to deliver a giant invoice to KKR, highlighting the huge debt they owe to the country’s coffers. Organisers are calling out for anti-capitalist cheerleaders, independent media makers, musicians, and any other trouble-makers. Tel 07501768682.

* See www.privateequitysucks.com for more

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